2023 Bloomberg Market Concepts ( BMC ) Exam 1
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- How accurately does GDP portray the economy and why?
Answer: Inaccurately because the scope of GDP measurements can change.
- Consider the formula GDP = C+I+G+(X-M). A country is undergoing a boom in
consumption of domestic and foreign luxury goods. In one year, the dollar growth in imports is greater than the dollar growth in domestic consumption. Assuming nothing else has changed, what happened to GDP?
Answer: It went down
- what is the meaning of each letter in the GDP formula, C+I+G+(X-M).
Answer:
C= Consumer spending I = Investment (Gross Fixed Capital Formation) G= Government Spending X= Exports M= Imports
- Here is the most important economic data for Australia and Sweden. which
economy did better year-over-year (YOY) in the fourth quarter of 2013 compared to the fourth quarter of 2012? Use the two charts to investigate.-
Answer: Sweden performed better
- In the United States, why is there a strong correlation between unemployment and
GDP?
Answer: Consumer spending accounts for two-thirds of the U.S. economy when the
number of unemployed consumers rises, there is less consumer spending.
- Here is a chart showing both nominal GDP growth and real GDP growth for a
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country. Which of the following can be a true statement at the time the chart was captured?Answer: The country has deflation. The bottom line is nominal growth and the top line is real growth.
- Which of the following lines is the best leading economic indicator?
Answer: PMI
- What typically happens to nonfarm payrolls, the PMI indicator, and housing starts at
the onset of a recession in the United States?
Answer: Nonfarm payrolls go down, the PMI indicator goes DOWN, the housing
starts goes down.
- Which of the following qualities of economic indicators do investors prize the
most?
Answer: Timeliness of release
- Why is the release of GDP statistics less interesting to investors than the release
of other economic indicators?Answer: Because GDP statistics are released well after other economic indicators.
- Which of the following important U.S. economic indicators is only avail- able
on a quarterly basis?
Answer: GDP
- Which economic indicator is most directly linked to unemployment?
Answer: - nonfarm payrolls
- What is the main reason that investment banks create estimates of eco- nomic
indicators?
Answer: To know when specific economic data points are a positive or negative
surprise.
- Which of the following is the biggest pitfall of economic indicators?
Answer: They do not consistently presage turning points.
- Which country is the fourth biggest importer and exporter?
Answer: Japan
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